Presented at the 4th Global Infrastructure Basel Summit 21 & 22 May 2014. Read more about the world leading platform for Sustainable Infrastructure Finance at www.gib-foundation.org. Next Summit: 27 & 28 May 2015 in Switzerland

1. Global Infrastructutre Summit, Basel, 22 May 2014
Innovative Infrastructure Finance
Giles Dickson, VP Environmental Policies & Global Advocacy, Alstom

2. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Alstom = Infrastructure
BUILDING ESSENTIAL INFRASTRUCTURE AROUND THE WORLD

3. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Infrastructure = minimising risk
Four types of risk in infrastructure projects
•policy / political risk
•capacity risk
•commercial risk
•technology risk
Projects happen if risk is commensurate with reward

4. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Sharing infrastructure project risk
• Public/
Private
sector
• Private
sector
• Public/
Private
sector
• Public
sector
Policy Capacity
CommercialTechnical
Presentation title - 01/01/2007 - P 4Allocate risks to those best placed to handle them

5. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
PPP model
Manchester Metro Line
1
Rouen Metrobus Line 1
Arlanda Airport Link
Barcelona LRT Ph 1 & 2
Jerusalem LRT Line 1
Florence LRT Lines 2&3
Participation sold
In operation
In construction
Milan metro Line 5 +
extension
Reims LRT Line 1
Barcelona
PPA September 2011 - Page 5
Nottingham LRT Line 2
Alicante-Albacete
ERTMS
CNM High Speed Line

6. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
PPP: Barcelona Trambaix Light Rail
• €300m
• 28 years
• private finance: 50 %
• traffic risk for operator
− 15km line
− 19 trams
− civil works
− power supply
− signalling
− engineering
− operation & maintenance
Contract: November 2000
Revenue: from April 2004

7. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Nimes Montpellier high-speed rail bypass
• €1.763bn
• 25 years
• Private finance: 66%
- 80km
- civil works
- track
- electrification
- signalling and telecoms
 no traffic risk
 availability payments on performance
 financial close in less than 4 months
Contract signed: June 2012
Revenue: from October 2017

8. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Benefits of PPP model
• Simple: single contract
• Clear incentives for private entity to deliver
• Volume: more projects in shorter time
• Effective risk-sharing
• Saves time and money

9. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Limits to PPP model
• works well for public service out-sourcing, e.g. in transport, but ….
−long-term and inflexible contracts
−doesn’t make project more profitable
−public debt (consolidation)
−needs to be carefully structured
−costly tendering process

10. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Financial instruments to help share and contain risk to
help contain risk instruments to help contain risks
Technology
subsidies
Insurance
Mechanisms
Loan
guarantees
Credit
enhancement
Public-Private
funds
Presentation title - 01/01/2007 - P 10
Risk
containment

11. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
No one size fits all ….
Need to distinguish between:
• finance for new and re-financing for existing projects
• green field and brown field projects
• needs of different sectors:
− roads
− rail
− telecoms
− water
− power generation
− power transmission & distribution
− airports
− hospitals / schools
• developed, emerging and developing economies

12. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Getting public policies right: the basics
Government needs to offset the worst downside risks:
−policy or regulatory change
−inconsistency of regulation or enforcement
−nationalization, confiscation or expropriation of assets
Mismatch between long-term nature of investment and short-term
policy and regulation

13. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Reducing political risk
Governments can reduce political risk by:
−long-term, predictable policy frameworks
−transparent planning and execution
−regulating in support of commercial activity
−regional co-ordination of policy and regulation

14. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Reducing capacity risk
Need to reduce capacity risk of investing in developing countries:
−Planning and co-ordination
−Policy / legal frameworks
−Physical / industrial capacity
−Financial services

15. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Helping projects access finance
Need to enhance projects’ credit-worthiness
• Subordinated debt
• Project bonds
• Concessional long-term debt financing
• Loan guarantees

16. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Reducing commercial risk
Need to support profitability of investments
Challenge:
• High up-front capital costs
• Investors’ sensitivity to commercial returns
• Need to revenues / cash flow
Responses:
• Ensure effective consumer markets, e.g. in power
• Advance market commitments
• Feed-in tariffs
• Price guarantees
• CO2 pricing for low-carbon projects

17. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Alstom PEF Semi-annual Report, April-September 2012
Case study: Caracas metro
VENEZUELA: Metro LOS TEQUES 2
• Contract value: €327m
• COFACE-covered French export credit funded by BNPP (lead bank), CACIB,
DEUTSCHE BANK, NATIXIS, SG, UNICREDIT, CIC
• French Finance Ministry approved €667m COFACE cover
• Brazilian (BNDES) and Chinese (FONDEN) financing for the balance of the
project costs

18. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
ETHIOPIA: ASHEGODA Wind Farm (120MW) and Transmission Upgrades
• Client: Ethiopian Electric and Power Corporation (EEPCo)
• Contract value: €100m+
• Concessional loans issued by AFD
• Commercial bank loans partially guaranteed by Coface
Case study: Ashegoda wind farm, Ethiopia
Alstom PEF Semi-annual Report, April-September 2012

19. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
UAE: DUBAI Al SUFOUH TRAM
• Client: Rail Transportation Authority
• Contract value: €385m
• Type of financing: COFACE-covered French export credit funded by HSBC (lead
bank), CITI, DEUTSCHE BANK
• Project costs 100% debt financed : ONDD export credit for BESIX’s scope
funded by DEUTSCHE BANK, plus IJARAH Islamic loan from AL HILAL BANK
Alstom PEF Semi-annual Report, April-September 2012
Case Study: Dubai tram

20. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Case Study: Vietnam hydro project
LAI CHAU Hydro
• $127m
• SINOSURE export credit
• Lenders: BNPP, CDB, BOC & CHINA EXIM

21. www.alstom.com
With Alstom, preserve the environment.
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22. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Project Financing Structure
(Special Purpose Vehicle)

23. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Public interventions to contain risk
• Green banks: to fill gaps in investment that commercial lenders
cannot serve
• Green bonds: structured with appropriate ratings to allow
institutional investors to provide greater debt financing
• Public Private Partnerships: apply public finance to the riskier
part of the financing structure, to leverage private finance
• Insurance mechanisms for policy/political risk
• Credit enhancement at the mezzanine debt level
• Loan guarantee programs
• Underwriting of PPA agreements
Presentation title - 01/01/2007 - P 23

24. © ALSTOM 2013. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or
correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without
notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
Risks/Challenges for Lenders/Developers
• Banks face effects of recession and capital ratio regulation
• Pension and institutional investors lack expertise in the area, and
can only invest in top rated securities
• Private equity funds may be unwilling to take project
development risk, or face issues of scale
• Infrastructure funds face operation and construction risks and
may be unclear on appropriate business models for some
projects
• Utilities face increased competition, falling demand and
weakened balance sheets
Presentation title - 01/01/2007 - P 24